July 28, 2009

Slow Economy Allows Food Packaging To Grow

The sluggish economy has given snack food manufacturers the opportunity to increase their packaging sizes without upping the cost of their goods.

The economic downturn has resulted in falling demand for food ingredients, which has allowed food companies to make their package sizes larger while keeping costs down.

"Think of your food packages like an economic barometer," Emily Fredrix, Food Industry Writer with the Associated Press wrote. "Times are tough, so costs are low and packages are bigger. When times are good, costs are high and packages, to compensate, get smaller."

Lowered costs for ingredients such as corn and oil have caused food makers, like Frito-Lay to play to the demands of consumers for more food at reasonable prices.

Fredrix says the chip aisle has become the location where the changing food package sizes are becoming more noticeable.

Frito-Lay has begun offering its full lineup of chips in bags that are 20 percent larger than they were last year.

While pricing of the goods has been unchanged, the sizes of Doritos bags have jumped from 12 ounces to 14.5 ounces. Fritos now hold 17.5 ounces, compared to 14.5 ounces last year, and Cheetos bags now hold 10.25 ounces, compared to the previous 8.5 ounces.

Milt Weinstock, of The Snack Factory, said bags of pretzel crisps have grown 25 percent larger "“ from 7.5 ounces to 6 ounces. He said the larger bag sizes should be available through the end of the summer.

Consumers who want more for their money, especially during tough economic times, welcome the availability of larger packaging for food, while manufacturers are able to keep costs unchanged.

But according to Fredrix, pricing experts say it's easier for food companies to increase packaging sizes rather than lower the cost of normal packages.

"Once prices are lowered, it becomes very difficult to raise them, since consumers may react negatively to that," wrote Fredrix.

"In other words: When good times return, don't be surprised if that bag of chips gets smaller again," she added.